Insurance excess, also known as a deductible, is the amount of money an insured individual is responsible for paying out of pocket before their insurance coverage begins. It acts as a buffer between the insured and the insurance company, determining the level of financial risk each party assumes.
Excesses play a crucial role in insurance policies by influencing premium costs and claim settlements. Higher excesses typically result in lower premiums, as the insurance company bears less financial risk. Conversely, lower excesses lead to higher premiums but provide more comprehensive coverage. The optimal excess level depends on individual circumstances and risk tolerance.
